U.S. stocks fall, halting record-setting run

Weekly claims for jobless benefits drop to five-year low

KateGibson

NEW YORK (MarketWatch) — U.S. stocks declined moderately on Thursday, halting Wall Street’s record-setting streak, even as data showed that weekly jobless claims fell to a five-year low.

“We’ve come a long way in the first four-and-a-half months of the year, so we’re ripe for a small correction,” said Joe Heider, regional managing principal for Rehmann Financial Group.

Any pullback would likely fall into the 5%-to-7% range, he added.

After rising as much as 39 points and falling as much as 58, the Dow Jones Industrial Average
DJIA, -1.35%
lost 22.50 points to end at 15,082.62.

After five straight record-high finishes, the S&P 500 index
SPX, -1.42%
lost 6.02 points to 1,626.67, with utilities hardest hit and health care faring best among its major sectors.

“The vast majority of our business clients and owners are doing very well, and are in full recovery mode, yet they are not feeling very positive,” said Heider, who attributes the negative sentiment to lingering fallout from the near-meltdown of the U.S. financial system and ongoing dysfunction in Washington.

“The shock was so severe in ‘08 and first quarter of ’09, so there is a hangover effect. And, I’ve never seen Washington as hell-bent on destroying one another,” he said.

Randy Frederick, managing director of active trading and derivatives at Charles Schwab, said: “Technically, the S&P 500 is in uncharted waters. People say there should be resistance at such and such, but there are no moving averages up there, so the only thing I can chart is the upward trend, and going to 1,650 within the next week or two is very realistic.”

For every stock on the rise, nearly two fell on the New York Stock Exchange, where 662 million shares traded.

Composite volume approached 3.4 billion.

“Profit-taking is the only thing that makes sense,” Frederick said of the losses that initially followed government data that cast an unexpectedly positive light on the labor market.

“The trend is still intact,” added Frederick, referring to the third consecutive weekly decline in applications for unemployment benefits.

The Labor Department reported an unexpected drop in jobless claims, which last week fell by 4,000 to 323,000. The less-volatile four-week moving average fell to 336,750, its lowest level since November 2007.

Treasury yields were mixed, with the benchmark 10-year note yield
US:10_YEAR
at 1.814%.

U.S. equities advanced on Wednesday as corporate-profit outlooks bolstered sentiment, with the Dow industrials notching their second all-time close above 15,000 and the S&P 500 Index closing at an all-time high for a fifth straight session.

The S&P 500 has risen 14% this year on expectations of further monetary easing by the U.S. Federal Reserve and other central banks around the globe, with South Korea the latest to join the nations that have cut benchmark rates.

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